Oil price falls below $96

The price of oil dropped 3 percent Thursday on expectations of higher global supplies and the impact of a strengthening dollar.

U.S. benchmark oil for February delivery fell $2.98 to close at $95.44 a barrel in New York. It was the biggest one-day drop in crude since November of 2012.

Brent crude, a benchmark used to price international crude used by many U.S. refineries, was down $3.02 to $107.78 a barrel.

U.S. oil was lower for the third straight day after closing above $100 per barrel Friday for the first time since October. Oil had risen because an improving U.S. economy lifted consumption.

The recent retreat in the price follows reports that an end to protests at a major Libyan oil field could return 300,000 barrels of daily production to the global market. That has raised expectations that supplies will be ample.

Brighter prospects for the U.S. economy have also raised expectations that the Federal Reserve will continue to shrink its stimulus program, and that has helped boost the value of the dollar. A stronger dollar makes commodities such as oil that are priced in dollars more expensive to buyers using other currencies. That lowers demand, and prices.

"Further improvement in the U.S. economy should be supportive of the U.S. dollar and that will continue to play against oil demand in emerging markets," said Olivier Jakob, an analyst at Petromatrix in Switzerland. He highlighted recent protests in Kuala Lumpur, Malaysia, against rising gasoline prices.

The U.S. national retail gasoline price rose less than a penny to $3.33 per gallon, according to AAA, OPIS and Wright Express. The price has climbed 6 cents per gallon over the past week and is 4 cents higher than a year ago.

In other energy futures trading:

— Wholesale gasoline fell 9.1 cents to close at $2.695 a gallon.

— Natural gas futures for February rose 9.1 cents to close at $4.321 per 1,000 cubic feet.